Exhibit 99.5
SECURITY AGREEMENT
(All Assets)
Sight Resource Corporation, a Delaware corporation with a principal place
of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, on behalf of itself and
any successors or assigns (the "Borrower"), and Fleet National Bank, a national
banking association with a usual place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, its successors and assigns (the "Bank"), are the
parties to this Agreement. In consideration of the Bank's extending or having
extended loans and/or other financial considerations to the Borrower on this
date or on one or more occasions, the Borrower agrees with the Bank as follows:
SECTION 1. THE SECURITY INTEREST: As security for the payment and performance
of all Liabilities (as defined below) now existing or hereafter arising of the
Borrower to the Bank, whether arising by future advances or otherwise, the
Borrower hereby grants a security interest to the Bank in the following
property, wherever located, and in all proceeds and products of such property:
1.01 ALL INVENTORY of the Borrower now existing or hereafter arising; meaning
all goods, merchandise, raw materials, supplies, goods in process,
finished goods, and other tangible personal property held by the Borrower
for processing, sale, or other business purpose, or to be used or
consumed in the Borrower's business.
1.02 ALL ACCOUNTS AND ACCOUNTS RECEIVABLE of the Borrower now existing or
hereafter arising; meaning all accounts, accounts receivable, papers,
notes, drafts, acceptances, and all other debts, obligations, and
liabilities in whatever form owing to the Borrower from any person, firm,
corporation, or any other legal entity ("Account Debtors").
1.03 ALL DOCUMENTS of the Borrower now existing or hereafter arising; meaning
all documents of title, including bills of lading, dock warrants, dock
receipts, warehouse receipts, and orders for the delivery of goods, and
also any other document which in the regular course of business or
financing is treated as adequately evidencing that the person in the
possession of it is entitled to receive, hold, and dispose of the
document and goods it covers.
1.04 ALL INSTRUMENTS of the Borrower now existing or hereafter arising;
meaning all negotiable instruments, securities, and any other writings
which evidence a right to payment of money and are not themselves
security agreements or leases and are of a type which are in the ordinary
course of business transferred by delivery with any necessary endorsement
or assignment.
1.05 ALL CHATTEL PAPER of the Borrower now existing or hereafter arising;
meaning a writing or writings which evidence both a monetary obligation
and a security interest in or a lease of specific goods.
1.06 ALL GENERAL INTANGIBLES, including, but not limited to, choses in action
of the Borrower now existing or hereafter arising, meaning any personal
property other than goods, accounts, chattel papers, documents, and
instruments, including, but not limited to, general intangibles of the
following description or type: goodwill, literary rights, contract rights
and rights to performance, copyrights, trade-marks, patents, computer
programs, access codes, source codes, trade secrets, customer lists and
all tax refunds.
1.07 ALL INVESTMENT PROPERTY of the Borrower, where located, now or hereafter
existing or hereafter acquired including all securities (whether
certificated or not), security entitlements, security accounts, financial
assets and related rights, together with all proceeds of any of the
foregoing.
1.08 ALL OTHER GOODS of the Borrower, wherever located, now existing or
hereafter acquired; meaning all motor vehicles, equipment, machinery, and
other tangible personal property, whether fixtures or not, any and all
records relating to any of the Collateral (as defined below) and all
attachments and accessories thereto and substitutes therefor.
It is the Borrower's express intention that the continuing grant of this
security interest remain as security for payment and performance of all of its
Liabilities, whether now existing, or which may hereinafter be incurred by
future advances, or otherwise, and whether or not such Liabilities are related
to any transactions described in this Agreement, by class or kind, or whether or
not contemplated by the parties at the time of the granting of this security
interest. The notice of the continuing grant of this security interest
therefore shall not be required to be stated on the face of any document
representing any of the Borrower's Liabilities nor otherwise identify it as
being secured hereby. If any Liability of the Borrower shall be or become
excused, the Borrower hereby expressly hypothecates his, her, its, or their
ownership interest in the Collateral to the extent required to satisfy such
Liabilities, without restriction or limitation. Any such Liabilities will
include all advances by the Bank whether or not the advances are made pursuant
to commitments.
SECTION 2. DEFINITIONS: All types of Collateral mentioned in Section 1 shall
have the meanings given to them under Chapter 106 of the Massachusetts General
Laws unless specifically defined otherwise in that section or elsewhere in this
Agreement. In addition, as used herein, the following terms shall have the
following respective meanings:
2.01 LIABILITIES means all liabilities of the Borrower to the Bank of every
kind and description, including those arising under a Loan Agreement with
the Bank of even date (the "Loan Agreement"), direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising, regardless of how they arise or by what agreement or instrument
they may be evidenced, including those arising under this Agreement, or
whether evidenced by any agreement or instrument, including obligations
to perform acts and refrain from taking action as well as obligations to
pay money.
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2.02 COLLATERAL means any and all property of the Borrower in which the Bank
now has, by this Agreement, or hereafter acquires a security interest and
specifically includes without limitation all inventory, accounts,
documents, instruments, chattel paper, general intangibles, investment
property and other goods, as those terms are defined in Section 1 hereof.
SECTION 3. BORROWER'S REPRESENTATIONS, WARRANTIES AND COVENANTS: To induce the
Bank to enter into this Agreement the Borrower represents, warrants, agrees, and
covenants that:
3.01 BORROWER OWNS ASSETS: The Borrower owns all its assets (excluding leased
assets), including the Collateral, as represented on any papers furnished
to the Bank and has and will have the exclusive right and authority to
grant security interests therein.
3.02 ASSETS FREE OF ENCUMBRANCES: All the Borrower's assets, including the
Collateral, are and will be kept in good condition and clear of all
security interests, mortgages, liens, and encumbrances, except those
granted or allowed under this Agreement and those set forth on the
attached Schedule A, and the Borrower has marketable title to all
Collateral and shall defend the same against the claims and demands of
all persons. The Bank has the right but not the duty to discharge any
liability giving rise to a lien on Collateral, including any liens of any
taxing authority, and the Borrower shall repay the Bank immediately for
all amounts paid by the Bank to discharge such liabilities.
3.03 LOCATION OF COLLATERAL: Tangible Collateral, including, but not limited
to, equipment, inventory, and fixtures, and if the Bank permits the
Borrower to retain possession thereof, instruments, documents, and
chattel paper, will be kept in the possession of the Borrower at its
place of business named above, or those set forth on the attached
Schedule A. The location or locations of such Collateral shall not be
changed without providing written notice thereof to the Bank.
Immediately upon the Bank's request, whether or not the Borrower is in
default with respect to any Liability to the Bank, the Borrower will turn
over to the Bank all instruments, documents and chattel paper which are
Collateral under this Agreement.
3.04 RECORDS AND INFORMATION WITH RESPECT TO BORROWER AND COLLATERAL:
(a) The Borrower will furnish all information, financial or otherwise,
that a duly authorized lending officer of the Bank deems reasonably
necessary to properly inform the Bank with respect to Collateral or
the condition of the Borrower. The Borrower will inform the Bank
immediately in the event of any material change in the Borrower's
financial condition or in the event of any material breach of this
Agreement or in the event that any of the representations and
warranties herein contained do not continue to be true and correct
in any material respect as though continuously made to the Bank.
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(b) The Borrower will execute upon the request of the Bank such
financing statements and like papers as the Bank deems reasonably
necessary to properly protect Collateral and its security interest
therein and will pay the cost of filing them in such offices as the
Bank requests.
3.05 FIXTURES: If any machinery, equipment, or other property serving as
Collateral under this Agreement is or will be attached to any real
estate, the Borrower will, upon Bank's request, furnish the Bank with a
description of such real estate with a disclaimer, signed by all persons
having an interest in said real estate, of any interest in the Collateral
which has or may have priority over the Bank's interest, and will notify
the Bank in writing of any intended sale, mortgage, or conveyance of such
real estate, and will give written notice of the terms and conditions of
this Agreement to any prospective purchaser, mortgagee, or grantee of
such real estate.
3.06 LIABILITIES OWING TO BORROWER: Any liabilities in whatever form owing to
the Borrower from any person, firm, or other legal entity serving as
Collateral are and will be good and valid indebtedness not subject to any
defenses, set-offs, claims, counter-claims, or agreements under which any
deduction or discount may be made thereon, except as specified to the
Bank on a statement or invoice made available to the Bank on or prior to
the date hereof or from time to time hereafter.
3.07 RETURNED MERCHANDISE: The Bank may in its unfettered discretion charge to
the Borrower the amount represented to be owing on any liability, in
whatever form owing to the Borrower, from whatever source, if said
liability serves as Collateral under this Agreement, and if any
merchandise giving rise to any such liability is returned, and until such
debit is made, Borrower shall hold any such returned merchandise
segregated in trust for the Bank subject to its exclusive disposition.
3.08 TAXES: The Borrower will pay any sales or other taxes which may become
due and payable with respect to a sale or other transaction giving rise
to any Collateral, unless such tax is being contested in good faith by
appropriate proceedings with appropriate reserves established.
3.09 CHATTEL PAPER: The Borrower agrees to label all chattel paper serving as
Collateral under this Agreement with the words, "Subject to the security
interest of (the Bank)", naming the Bank.
3.10 INSURANCE:
(a) The Borrower agrees at its own expense to keep all Collateral
insured in accordance with the requirements of the Loan Agreement.
(b) The Bank shall have no risk, liability, or responsibility in
connection with payment or non-payment of any loss, the sole
obligation of the Bank being to
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credit the Borrower's loan account with the net proceeds of any
insurance payments received on account of any loss.
3.11 SALE OF COLLATERAL: Unless otherwise specifically provided by this
Agreement or the Loan Agreement, the Borrower will not sell any
Collateral without the prior written consent of the Bank.
Notwithstanding, provided the Borrower is not in default hereunder the
Borrower shall have the right to sell inventory, which may be Collateral,
in the ordinary course of its business. A sale in the ordinary course of
business shall not include a transfer in total or partial satisfaction of
a debt, other than a debt which has arisen solely as a result of
prepayment or deposit by customers of the Borrower for items of inventory
subsequently to be purchased or delivered. Borrower shall also be
entitled to sell (or trade in) obsolete equipment or inventory so long as
Borrower receives therefor a sum (or credit) substantially equal to such
equipment's or inventory's fair value.
3.12 BANK'S RIGHT TO POSSESSION:
(a) Unless otherwise provided by law, at any time after the occurrence
of an Event of Default hereunder, the Bank shall have the right to
the immediate possession of all Collateral and its products and
proceeds, and in its sole discretion may operate and use said
Collateral, complete work in process, and sell Collateral without
being liable to the Borrower on account of any losses, damage, or
depreciation that may occur as a result thereof so long as the Bank
shall act in good faith, in a commercially reasonable manner.
(b) Unless otherwise provided by law, at any time after the occurrence
of an Event of Default hereunder, the Bank may, at the expense of
the Borrower, maintain possession of the Borrower's premises by the
use of a custodian or custodians, or in such other manner as the
Bank may determine.
(c) Unless otherwise provided by law, at any time after the occurrence
of an Event of Default hereunder, the Bank may at all times, at the
expense of the Borrower, enter upon any premises on which Collateral
may be situated and remove any such Collateral to such other places
as the Bank determines.
(d) Unless otherwise provided by law, the Bank may at any time, after
the occurrence of an Event of Default hereunder, transfer any
Collateral into its own name or that of its nominee and may at any
time after demand or the occurrence of an Event of Default hereunder
receive the income thereon and hold the same as security for
Liabilities or apply it to principal or interest due on the
Liabilities.
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SECTION 4. COLLECTION:
4.01 (a) The Bank may at any time and from time to time after the occurrence
of an Event of Default hereunder require the Borrower to establish a
"lock box" arrangement with the Bank for the receipt of Account
Debtor remittances.
(b) The Bank may at any time after the occurrence of an Event of Default
hereunder, notify Account Debtors, on any Collateral, or require the
Borrower to notify such Account Debtors, that they shall make all
payments on their account or accounts with the Borrower directly to
the Bank; or require the Borrower to hold all proceeds received from
collection in trust for the Bank without commingling the same with
other funds of the Borrower, and to turn the same over to the Bank
immediately upon receipt the identical form received, at which time
the Bank may at its option either apply such proceeds to the
Liabilities of the Borrower, in accordance with Section 4.03, or
release such proceeds to the Borrower for use in its business.
(c) The Bank has the right at any time after the occurrence of an Event
of Default hereunder, directly or through its agent, to collect
proceeds directly from Account Debtors, on any Collateral and for
that purpose to do all acts and things necessary or incident
thereto, including the right to ▇▇▇ on such accounts, and to sell,
transfer, set over, compromise, discharge, or extend the whole or
any part of the accounts.
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(d) Borrower does hereby make, constitute and appoint any officer or
agent of Bank as Borrower's true and lawful attorney-in-fact, with
power to endorse the name of Borrower or any of Borrower's officers
or agents upon any notices, checks, drafts, money orders, or other
instruments of payment (including payments payable under any policy
of insurance on the Collateral) or Collateral that may come into
possession of the Bank in full or part payment of any amounts owing
to Bank; to sign and endorse the name of Borrower or any of
Borrower's officers or agents upon any warehouse receipts, drafts
against debtors, assignments, verifications and notices in
connection with accounts, and any instruments or documents relating
thereto, or to Borrower's rights therein; to give written notice to
such office or officials of the United States Post Office to effect
such change or changes of address so that all mail addressed to the
Borrower may be delivered directly to the Bank; granting unto
Borrower's said attorney full power to do any and all things
necessary to be done in and about the premises as fully and
effectually as Borrower might or could do, and hereby ratifying all
that said attorney shall lawfully do or cause to be done by virtue
hereof. Neither the Bank nor the attorney shall be liable for any
acts or omissions nor for any errors of judgment or mistake, except
for their gross negligence or willful misconduct. This power of
attorney shall be irrevocable for the term of this Agreement and all
transactions hereunder and thereafter as long as Borrower may be
indebted to Bank. With the exception of the power granted to the
Bank to endorse checks, drafts, and any other form of payment, which
right may be exercised at any time and from time to time, the Bank
will not exercise any of the powers granted hereunder absent the
occurrence of an Event of Default hereunder.
4.02 Until the Bank exercises the rights contained in Section 4.01 following
an Event of Default hereunder, the Borrower may continue to collect
proceeds from Account Debtors on any Collateral and use the proceeds in
any lawful manner not inconsistent with the terms of this Agreement.
4.03 In the event that the Bank exercises the rights contained in Section 4.01
following an Event of Default hereunder, the Bank shall credit to the
Borrower the proceeds obtained from Account Debtors of the Borrower, such
credits to be entered within two (2) business days after receipt of the
proceeds. Such credits, however, are conditional upon final payment to
the Bank at its office in cash or solvent credits of the items giving
rise to them, and, if any item is not so paid, the amount of any credit
given with respect to any of the Borrower's Liabilities shall be reversed
or, in the discretion of the Bank, it shall be charged to any deposit
accounts of the Borrower with the Bank, whether or not the item is
returned.
SECTION 5. DEFAULT AND ACCELERATION:
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5.01 Any or all of the Liabilities of the Borrower to the Bank shall, at the
option of the Bank and notwithstanding any time or credit allowed by any
instrument evidencing a Liability, be immediately due and payable without
notice or demand upon the occurrence of any of the following events of
default (each an "Event of Default" hereunder):
(a) The occurrence of an Event of Default under the Loan Agreement
following the expiration of any applicable grace period;
(b) An injunction or attachment against property of the Borrower remains
undischarged for a period of thirty (30) days;
(c) The security interest granted to the Bank in the Collateral shall,
at any time after the execution and delivery of this Agreement, for
any reason, ceases (i) to create a valid and perfected first
priority security interest in the Collateral including, without
limitation, the occurrence of any event which would cause a lien
creditor, as that term is defined in Section 9-301 of the Code, to
take priority over advances made by Bank; (ii) this Agreement shall
cease to be in full force and effect or shall be declared null and
void, or the validity or enforceability hereof shall be contested by
the Borrower; or (iii) any guarantor of the Liabilities denies it
has any further liability or obligation with respect to such
Liabilities or terminates its guaranty or fails to honor any of its
Liabilities under such guaranty.
5.02 Upon the occurrence of any Events of Default set forth in Section 5.01,
the Bank shall have all the rights and remedies of a secured party under
Chapter 106, Article 9, of the Massachusetts General Laws, in addition to
all other rights and remedies mentioned in this Agreement. Unless
otherwise provided by law, the Bank may require the Borrower to assemble
any tangible personal property constituting Collateral and make it
available to the Bank at a place to be designated by the Bank which is
reasonably convenient to both parties.
5.03 The Borrower hereby grants to the Bank a nonexclusive irrevocable license
in connection with the Bank's exercise of its rights hereunder, to use,
apply and affix any trademark, trade name, logo or the like in which the
Borrower now or hereafter has rights, which license may be used solely by
the Bank upon the occurrence of any Event of Default.
SECTION 6. EXPENSES:
6.01 The Borrower shall pay or reimburse the Bank on demand for all reasonable
out-of-pocket expenses which the Bank may incur in connection with this
Agreement and the preparation thereof, the making of any loan in
connection herewith, or the collection of the Borrower's Liabilities
secured under this Agreement, including but not limited to reasonable
attorney's fees, and reasonable fees and expenses related to the
perfection and protection of any security interest granted by
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the Borrower; or the Bank, if it chooses, may charge any of the
Borrower's funds on deposit with the Bank.
SECTION 7. GOVERNING LAW, MODIFICATION, AND WAIVERS:
7.01 This Agreement, including modifications or additions thereto, will be
governed, interpreted, and construed in accordance with the laws of the
Commonwealth of Massachusetts.
7.02 The rights, remedies, powers, privileges and discretions of the Bank
hereunder shall be cumulative and not exclusive of any rights or remedies
which it would otherwise have.
7.03 Any determination that any provision of this Agreement or any application
thereof is invalid, illegal or unenforceable in any respect in any
instance shall not affect the validity, legality and enforceability of
such provision in any other instance, nor the validity, legality or
enforceability of any other provision of this Agreement.
7.04 No modification of this Agreement will be binding unless in writing and
signed by a duly authorized lending officer of the Bank.
7.05 Any default by the Borrower may be waived by the Bank in writing signed
by a duly authorized lending officer of the Bank, but no such waiver
shall extend to any subsequent default or any other default.
7.06 No delay on the part of the Bank in exercising any of the rights granted
or referred to in this Agreement shall be held to constitute a waiver.
SECTION 8. NOTICE, ASSIGNMENT, TERMINATION:
8.01 Unless otherwise provided for by law, any demand, notice, or other
communication to the Borrower that the Bank may elect to give shall be
effective if sent in accordance with the terms of the Loan Agreement.
8.02 If at any time or times by assignment or otherwise the Bank assigns this
Agreement, such assignment shall carry with it the Bank's powers and
rights under this Agreement and the transferee shall become vested with
said powers and rights whether or not they are specifically referred to
in the transfer. If and to the extent the Bank retains any other
Liability or Collateral, the Bank will continue to have the rights and
powers herein set forth with respect thereto.
8.03 This Agreement shall continue until all Liabilities of the Borrower to
the Bank have been satisfied.
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8.04 Any obligations the Bank may have to the Borrower, whether now existing
or hereafter arising, run only to the Borrower and may not be assigned or
transferred by said Borrower without the written consent of a duly
authorized officer of the Bank.
SECTION 9. HEADINGS: SEAL:
9.01 Headings preceding the text of the several sections hereof are for the
convenience of reference only and shall not constitute a part of this
Agreement nor shall they affect its meaning, construction, or effect.
9.02 It is intended that this Agreement take effect as a sealed instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as a sealed instrument this 15th day of April, 1999.
WITNESS: FLEET NATIONAL BANK
(As to Both)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Witness ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
SIGHT RESOURCE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chief Executive Officer
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SCHEDULE A
ENCUMBRANCES
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SECURED PARTY OR LESSOR: COLLATERAL:
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ADDITIONAL LOCATIONS
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